Prime Times

Texas Specialty Contractors Benefiting From Healthy Economy

By Rob Patterson

It's good times in the construction business in the Lone Star State, as our roundup of Texas' top specialty contractors attests. Surveyed firms say the numbers are strong and jobs plentiful, and even though some jitters remain about a housing bubble bursting, the prognosis for the coming years is unanimously positive.

Keystone Concrete Placement of Houston had a whopping 2005 to rival those of a good-sized general contractor, posting $191 million of work, nearly $188 million of it in-state. Based on that revenue, the firm ranked No. 1 in Texas Construction's ranking of the state's top specialty contractors.

Keystone was founded in 1991 by president Donald Stewart and his sons. "My father and I had worked for a general contractor doing their concrete," said Donald's son Craig Stewart. "The opportunity presented itself to start our own company, and we haven't looked back."

The family business also includes brothers Mark Stewart and Brad Stewart.

Keystone's recent projects include the Perkins Row retail complex and parking garage in Baton Rouge, La.; a 900,000-sq.-ft. tilt-wall job for the Underwood Distribution Center in Pasadena; and educational work such as a new high school for Cy-Fair Independent School District and a new junior high school in Montgomery.

"One of the things we sell ourselves on is quality and safety," Craig Stewart said. "We have four safety people who work for us. We pretty much sell that and our track record."

He said that the family ownership partners are all involved in the company's day-to-day operations, and he cited the firm's large arsenal of equipment and good ongoing relationships with suppliers.

Stewart has seen the effects of the recent concrete shortage. "We've fared through it better than probably anyone else in the market," he said. "But it does exist and has created some small slowdowns on some jobs."

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He's optimistic about the future of the Texas construction market and predicted that Keystone will see a growth of 8 to 10 percent in 2006. "I think we'll maybe see not quite as much growth, but we still see it being pretty active," Stewart added.

Brandt Engineering Co. of Dallas is the veteran name among the spotlighted subs. The firm was founded in 1952, steadily grew in the 1970s and 1980s and was bought by a consolidator in the early 1990s that later went bankrupt. In 1995 the firm was purchased and revived by president Mark Zilbermann.

Last year, Brandt did $153 million in business in Texas, 87 percent of it mechanical and plumbing and 13 percent of it electrical - a new line started in the past five years. The firm, which ranked No. 4 on the top specialty contractors list, has offices in Fort Worth and Austin in addition to its Dallas headquarters.

Brandt has stayed busy with high-profile jobs such as the recent Texas Instruments plant expansion in Richardson and the W Dallas Victory Hotel & Residences. The firm has also worked on a variety of green-field and expansion hospital projects across the state, as well as several jobs for Texas Christian University, including the school's new central plant.

Zilbermann attributed his firm's strength to its many longtime employees and to flexibility in meeting market needs. "We've been able to adapt to the market," he added. "If there are a lot of data centers being built, we're the best damn data center contractors around. With the growth in health care, we've learned how to do that in recent years. When there was a lot of semiconductor work we learned how to do that."

Zilbermann said that there is a lot of opportunity now. "We've had the busiest bidding we've ever had during the past few months, and our backlog is larger than it's ever been," he added. He said he'd like to see the firm "push the envelope a bit" and begin to do design-build MEP, "our ideal delivery method."

Tri Dal Ltd. and Affiliates in Southlake has steadily expanded since its beginnings as Rick Muller Construction in 1984.

The site and utilities firm ranked No. 19 in the list of the state' top specialty subcontractors. The firm became Tri Dal Utility Co. in 1985 and added Tri Dal Excavation in the mid-1990s.

In 1997, it opened another affiliated but independently operated company based in Round Rock, Tri Dal Austin, and did the same two years ago with Tri Dal Salina north of Dallas. (Another affiliate, Sunrise Utilities, is based in Las Vegas, Nev.)

Tri Dal performed $66.9 million of work in state in 2005 out of a $75.2 million companywide total. The majority of it was site and utility work (65 percent) followed by excavation (24 percent, which Tri Dal only does from its Southlake office) and trenching and trucking (5 percent).

CEO and president Rick Muller said that the company's expansion was a way to give long-term employees a greater share in and control over their own destinies.

"We don't compete and bid against each other," he said. "They have small enough operations to know everyone in their divisions on a first-name basis, which is one thing that I feel was part of the success of the original company."

Major recent projects include the new Dallas headquarters for the Hunt Petroleum Corp. and a new storm drain around Texas Christian University's Amon G. Carter Stadium in Fort Worth.

Commercial jobs are the firm's bread and butter, although it does perform some highway projects and works in residential subdivisions.

"Our bonding capacity is pretty high and we're able to staff and equip the large jobs overnight," Muller said. "We know a lot of the inspectors and the specifications for many of the municipalities, and our prompt payment schedule helps us to obtain parts quicker and discounts from our suppliers."

He said that many of Tri Dal's employees have come from contractors and suppliers the company has worked with.

"I think the market is pretty steady here," Muller said of Tri Dal's home base in the Dallas-Fort Worth area. "The area will continue to have enough work to go around. Our cost of living is more reasonable here than on the West Coast, and I think that will support us."

Fifth Wall Roofing Systems Inc. of Austin has been in business since 1973, originally installing built-up roofs before it began focusing on single-ply, ballasted systems.

"The market has moved in the direction of our specialty," and that helped the company post $17 million in 2005 billings in Texas, said president Todd Hewitt.

The firm ranked No. 61 out of the top 126 specialty firms. It has stayed busy around the Austin area in recent years with jobs such as the Frost Bank Tower in downtown Austin and a slew of retail projects such as the new Round Rock Premium Outlets mall, South Park Meadows in Austin, Chandler Creek in Round Rock and an expansion of the Prime Outlets mall in San Marcos. Health-care projects have also been part of its portfolio recently.

Fifth Wall boasts a sizable service department with six fully equipped crews in the field. And Hewitt sees the increasing popularity of TPO roof systems as a growth area, especially in Texas because of the heat-resistant properties of thermoplastic polyolefin.

"Energy awareness is about the No. 1 issue these days," Hewitt added. "I think it's just beginning to gather momentum."

Slack & Co. Contracting Inc., based in Houston, performed $15.6 million of work in 2005. The majority was excavation (70 percent, including Slack's underground utility work), followed by paving (15 percent), concrete (10 percent) and demolition (5 percent). The firm ranked No. 65 on the top specialty firms list.

"We're somewhat unique in that we cross several specialty lines," said president Jim Slack, Jr., who in 1992 took over the company founded in 1963 by his uncle and rescued it from financial hard times.

Top projects of late include site clearing, ponds, roads, parking and offsite drainage for the 183-acre JDA Distribution Center complex in Pasadena; the new 13-story faculty center for M.D. Anderson in Houston; and drainage work for TxDOT in Brazoria County and La Porte.

"We try to operate in as sophisticated a manner as any of our general contractors and owners," Slack said. "Safety, quality and productivity are a big part of everything we do. If we can deliver the project to the GC a week or two or three early, that time can be put that back into the schedule. If we're on the job, they know we'll do a good job and they can worry about something else."

He said that the current market offers the "best work that's come out for bid in several years, " but he is concerned about the effect of rising interest rates.

"Everyone keeps talking about how the housing bubble may burst, and if it does what effect that will have, but Houston is in a particularly good position to weather the storm," Slack added.

He said that the energy industry in Houston remains vital, "and that should bring good things to the Houston construction market. If there is a downturn, I think it will be for Houston a light downturn or a leveling off."

Comfort-Air Engineering Inc., an HVAC firm based in San Antonio, enjoyed a $13.8 million year in 2005, the 41st year of operation for the family-owned firm, which ranked No. 71 in the list of specialty firms.

Four members of the Freund family are active in the firm's local operations, which recently included upgrades on the HVAC systems for Colonies North Elementary School and Tesoro Petroleum's data center. Comfort-Air also worked on a new education building for the Community Bible Church and a warehouse expansion for Coca-Cola Co.

President Matt Freund cited the company's strengths as quality and longevity. "We're a family business that treats our clients like a friend, not a customer." He said Comfort-Air keeps its quality and innovation on the cutting edge thanks to a peer group of eight noncompeting HVAC companies from across the nation that meets a couple of times a year to discuss trends, innovations, business strategies and other common concerns.

He called the Texas market red-hot and said the trend is bound to continue, especially in San Antonio. "Our little city is growing up," Freund said. "They're building a busload of houses, and whenever they do, they need schools, retail and churches. We're going to ride the wave."